There are plenty of advertisements today for people to settle their debts instead of going through credit counseling. Here are some things you need to know about debt settlement / negotiation.

YOU NEED TO BE SERIOUSLY DELINQUENT IN YOUR PAYMENTS IN ORDER TO SETTLE. SO IF YOU ARE UP TO DATE WITH YOUR PAYMENTS, YOU RUIN YOUR CREDIT BY NOT PAYING!

NUMEROUS LATE MARKS ON YOUR CREDIT REPORT.

LATE AND OVER THE LIMIT FEES.

CONSTANT COLLECTION CALLS, DAY AND NIGHT.

BALANCES CONTINUE TO RISE DRAMATICALLY.

RAPID DECLINE OF YOUR CREDIT SCORE.

YOU CAN BE SUED PERSONALLY AT ANY TIME RESULTING IN WAGE GARNISHMENTS, LIENS OR COURT APPEARANCES.

CREDITORS WILL FILE A1099 FORM WITH THE IRS AND YOU WILL HAVE TO PAY INCOME TAX ON WHAT EVER AMOUNT OF DEBT YOU'RE FORGIVEN.

The amount forgiven is considered income by the IRS. So you will pay taxes on the forgiven amount.